EEOC conciliation efforts ruling is only a partial victory for employers

A U.S. Supreme Court ruling that says the Equal Employment Opportunity Commission's conciliation efforts before filing litigation against businesses are subject to judicial review is, at best, a qualified win for employers, and subsequent court rulings will be needed to develop its full implications, observers say.

The unanimous April 29 ruling by the high court in Mach Mining L.L.C. v. Equal Employment Opportunity Commission holds that while the agency's conciliation efforts are subject to judicial review, it also has “extensive discretion” to determine the kind and amount of communication it has with an employer.

The ruling explores both the agency's and employer Mach Mining's positions on the issue and finds flaws in each.

The case began when a woman filed a charge with the EEOC claiming that Marion, Illinois-based Mach Mining had refused to hire her as a coal miner because of her sex, according to the ruling.

After sending two letters on the matter to the company, the EEOC filed suit in U.S. District Court in Benton, Illinois, charging the firm with sex discrimination in its hiring. Mach Mining contended that the EEOC had failed to first conciliate the dispute in good faith. The trial court held that it had the right to review whether the commission had made a reasonable effort to conciliate the matter.

Its ruling was reversed by the 7th U.S. Circuit Court of Appeals in Chicago, which held in 2013 that the EEOC's conciliation efforts are not subject to judicial review.

“The Government (once having accepted the necessity for some review), proposes that courts rely solely on facial examination of certain EEOC documents. Mach Mining argues for far more intrusive review,” says the ruling. “We accept neither suggestion, because we think neither consistent with the choices Congress made in enacting Title VII.”

Title VII of the Civil Rights Act of 1964 demands that the EEOC informs the employer about specific allegations of unlawful employment practices and that it “try to engage the employer in some form of discussion” to remedy the allegedly discriminatory practice, says the ruling.

This “relatively bare bones review allows the EEOC to exercise all the expansive discretion Title VII gives it to decide how to conduct conciliation efforts and when to end them,” says the ruling.

If the EEOC does not provide the required information or engage in conciliation, however, “a court must conduct the fact-finding necessary to decide that limited dispute.”

The decision “is great news for victims of discrimination on whose behalf we are seeking relief,” EEOC General Counsel David Lopez said in a statement.

Mach Mining's attorney did not respond to a request for comment.

The ruling is only a partial victory for employers at best, observers say. It establishes a “pretty low burden” for the agency to overcome before it can file a lawsuit in federal court, said Frank A. Chernak, a partner with law firm Ballard Spahr L.L.P. in Philadelphia. “It doesn't change the landscape that much.”

“It really does not provide any opportunity to review the EEOC's conduct during the course of the mediation process,” said Barry A. Hartstein, a shareholder at Littler Mendelson P.C. in Chicago.

At the same time, “It certainly potentially creates more leverage for the agency in making demands that are potentially excessive, at least to the extent the employer will have limited opportunity to try to challenge the EEOC's conduct in any subsequent litigation,” Mr. Hartstein said.

However, the important issue here is whether the Supreme Court was willing to give the EEOC free rein, and “on that score, the EEOC did not prevail,” said David Barmak, a member of law firm Mintz Levin Cohn Ferris Glovsky & Popeo P.C. in Washington. “There are some restrictions and some requirements the EEOC needs to meet.”

Subsequent litigation in the lower courts will further flesh out the ruling, many observers say.

“What's not clear from the decision is whether, really, the EEOC is going to be required to provide more information to employers, or if they're going to just continue to do what they've always done,” which is to send letters that are “often bare bones and cryptic,” said Lindsey M. Marcus, an associate with law firm Franczek Radelet P.C. in Chicago.

Also still unclear is the extent to which the EEOC must first conduct an investigation before filing charges, said Marcia McShane, a partner with law firm Constangy, Brooks, Smith & Prophete L.L.P. in Nashville, Tennessee. “The investigative issue is going to be the big one that comes next,” she said.

“The practical outcome of this is that the EEOC realizes that they have to jump through some hoops in the conciliation process, but the question is, how many and how high ... and that has to be litigated,” said Raanon Gal, an attorney at Taylor English Duma L.L.P. in Atlanta.

But David Gevertz, a shareholder at Baker, Donelson, Bearman, Caldwell & Berkowitz P.C. in Atlanta, who labeled the ruling a “pyrrhic victory” for employers, said, “If you take the Supreme Court at its word, the lower courts will only be able to engage in very limited fact finding with a virtually nonexistent penalty.”